March 4, 2020 / 3:16 PM / a month ago

UPDATE 1-Coronavirus hasn't had significant impact on Israeli economy: central bank

(Adds details, quotes from statement)

TEL AVIV, March 4 (Reuters) - The Bank of Israel said on Wednesday that the coronavirus outbreak has not had a major impact on the economy, but if conditions worsen significantly, the monetary policy committee will use the variety of tools at its disposal as necessary.

The central bank, echoing comments it made last week, said that “at this stage, despite the specific impacts experienced by firms in a variety of industries, there is no evidence of a significant macroeconomic impact on the Israeli economy”.

If the spread of the virus is halted in the coming months, the assessment is that the global economy is expected to recover relatively quickly, the bank said in a statement.

“If the crisis persists, and particularly if the preventive measures in Israel become more serious and persistent, there is expected to be a significant economic impact,” it said.

The bank’s monetary policy committee held its weekly meeting on Wednesday, during which it discussed the measures taken by other central banks, and various scenarios of how measures taken in Israel can directly affect economic activity.

The U.S. Federal Reserve cut interest rates on Tuesday in a bid to shield the world’s largest economy from the impact of the coronavirus, though the move failed to comfort U.S. financial markets.

“The committee’s assessment is that the terms of financing in the economy at the present time are very easy, and the low interest rate combined with the continuing foreign exchange purchasing policy provide the necessary support for the economy,” the Bank of Israel said.

The committee will hold its periodic monetary discussion at which the interest rate decision will be made on April 5 and 6, and will continue convening on a weekly basis. The bank held its benchmark interest rate at 0.25% for a 10th straight time on Feb. 24.

“The strong basic economic data in the Israeli economy - including the low debt-to-GDP and unemployment rate, the current account surplus and the high level of the foreign exchange reserves, and the strong financial system - increase the economy’s robustness in the face of developments,” the bank said. (Reporting by Tova Cohen and Ari Rabinovitch; editing by Nick Macfie)

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